If the trend continues the way it has been for the last few years, it would not be any surprise that cryptocurrencies could someday be the store of value instead of gold.
Several issues to consider
This statement was made by the Bank of Singapore, the private banking subsidiary of OCBC Bank of Singapore. It also stated that there are many hurdles that need to be addressed before cryptocurrencies can have that type of demand. This includes overcoming the volatility of the asset as well as regulatory issues. On top of that, risks would need to be addressed and overcame as well.
Experts take on this
The chief economist at the Bank of Singapore, Mr Mansoor Mohi-uddin said that trustworthy institutions that can securely hold digital currencies will need to be present and that is what investors would want. Then, they need to find ways to improve liquidity so that volatility can be better managed and subsequently reduced. If these issues are taken care of, then BTC could well be a potential safe-haven asset for investors. They will surely start looking to diversify their assets in their respective portfolios.
Compared to precious metals like gold, cryptos are easier to move and store. However, because it is a fully digitized platform, they are more vulnerable to hacking and other forms of breaches. At the moment, cryptocurrencies are highly popular with more investors taking them up to add to their investment portfolio. However, it would be some time before cryptos can fully replace fiat currencies while analysts believe that this might not ever happen.
